Gce Model Questions Vol1 2017 Economics Question 43

Practice objective / multiple choice question 43 from the 2017 Gce Model Questions Vol1 Economics examination.

Gce Model Questions Vol1 2017 Economics Objective / Multiple Choice Hard Difficulty
Question 43 GCE_MODEL_QUESTIONS_VOL1 • 2017 • ECONOMICS • objective

A country imports sugar. World price is £400 per tonne. Domestic demand is \( Q_d = 5000 - 2P \) and domestic supply is \( Q_s = 3P - 600 \). The government imposes an import quota of 2000 tonnes and auctions quota licences. (a) Find the domestic price of sugar after the quota is imposed. (b) Calculate the quota rent (government revenue). (c) Determine the dead‑weight loss caused by the quota.

Answer Options

Correct Answer A. Domestic price = £720 per tonne; quota rent = £640,000; dead‑weight loss = £256,000
B. Domestic price = £740 per tonne; quota rent = £640,000; dead‑weight loss = £300,000
C. Domestic price = £680 per tonne; quota rent = £560,000; dead‑weight loss = £224,000
D. Domestic price = £720 per tonne; quota rent = £720,000; dead‑weight loss = £256,000
Correct Answer
A
Correct Option:
Domestic price = £720 per tonne; quota rent = £640,000; dead‑weight loss = £256,000

About This Question

This is Gce Model Questions Vol1 2017 Economics Question 43. It is one of the objective questions from the 2017 Gce Model Questions Vol1 Economics examination.

Difficulty level: Hard .

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